Andhra Bank plans to raise Rs 800 cr

Andhra Bank plans to raise around Rs 800 crore to support its capital requirements to meet its growth plans. The bank plans to raise the money through Qualified Institutional Placement (QIP) and from the Government of India.

Speaking to reporters in Chennai, Andhra Bank Chairman and Managing Director C V R Rajendran said the mode to mobilise the fund will be decided by the third quarter of 2014-15. “Initially, we will approach the Government of India or we will look at QIP,” said Rajendran.

He noted, last year the bank received around Rs 200 crore from the Government of India, which currently holds 60 per cent.

The mobilisation of fund would support bank’s proposed 20 per cent growth in 2014-15, said Rajendran. He said, for the nine-month period, bank’s total income increased by 13 per cent to Rs 11,572 crore, from Rs 10,241 crore during the same period last year.

During the third quarter the bank has reported a 82.1 per cent drop in net profit to Rs 46 crore compared to Rs 257 crore, year ago. Rajendran attributed this is to a higher provisioning on account of high NPAs.

The bank’s gross NPAs was at 5.45 per cent and the bank’s NPAs represent secured assets. The accumulation of bad loans was because of the difficult economic condition triggered by policy logjam of the government, he said. The NPA was mainly due to power sector, which contributes around 11 per cent and infrastructure, which accounts 10 per cent of total NPAs.